TRENTON – Legislation that would reduce the amount of money employees pay into the Temporary Disability Insurance fund has cleared the Senate Labor Committee.

The bill — whose sponsors include state Sen. Fred Madden, D-Washington Township — would require the Commissioner of the Department of Labor and Workforce Development, beginning in 2012, to make annual adjustments in the rate of contribution paid by workers into the Temporary Disability Insurance fund.

Over the past 16 years, a total of $773 million in funds that workers paid into Temporary Disability Insurance has been diverted to help balance the state budget. Last November, voters approved a Constitutional amendment to ensure that assessments on employee wages by the state be dedicated to the payment of employee benefits and not diverted for other purposes.

“Public and private workers use temporary disability benefit funds, so this bill will be a big step forward in alleviating the cost of them doing so. It is a simple, efficient measure to put money back in the pockets of working residents, something we need to be doing more of,” said Madden, chair of the Senate Labor Committee.

The legislation now heads to the Senate Budget and Appropriations Committee.